Tag Archives: IFI

EBRD threatens pipeline funds if Azerbaijan fails to improve transparency

SEPT. 27 2016 (The Conway Bulletin) – The EBRD said it may withhold funds for a pipeline linking gas fields in the Caspian Sea to consumers in Europe until Azerbaijan agreed to provide more transparency into its state linked energy companies.

Taking a tough stance, the EBRD, a London-based intra-governmental bank set up during the collapse of the Soviet Union to fund business and infrastructure projects, said unless Azerbaijan complied with the Extrac- tive Industry Transparency Initiative (EITI), it would withhold $1.5b ear- marked for the TANAP pipeline.

The EBRD’s stance casts fresh doubts over the Azerbaijani leadership’s commitment to transparency into its business dealings.

Riccardo Puliti, the EBRD’s managing director for energy, said that EITI, considered a global benchmark for transparency in the extractive sectors, would consider whether Azerbaijan had made progress at its next meeting in Kazakhstan in October.

“In the case of TANAP, it is important that this progress takes place. If there is no progress it will be quite difficult to justify a large amount of financing,” he told Turkish media.

Last year, the EITI downgraded Azerbaijan from ‘compliant’ to ‘candidate’ country and criticised it for a lack of transparency.

TANAP will link Azerbaijan’s pipe- line network to Greece via Turkey, forming part of the Southern Gas Corridor. SOCAR, Azerbaijan’s state- owned energy company, owns a 58% stake in TANAP, Turkey’s Botas (30%) and BP (12%) own the rest. TANAP will link with TAP which will pump the gas to Italy.

Azerbaijan has yet to react to the EBRD’s statement.

Aliya Tskhay, a researcher focus- ing on Azerbaijan at the University of St Andrews said that the EBRD may have been trying to encourage Azerbaijan to engage more closely with the EITI.

“The EBRD request seems to be an encouragement for Azerbaijan’s government to still be part of the EITI, despite a status downgrade last year,” she said.

TANAP will cost $10b to build, while TAP has a price tag of around $5b.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

ADB funds road in Kyrgyzstan

SEPT. 28 2016 (The Conway Bulletin) – The Asian Development Bank (ADB) agreed to issue $95m in loans and grants to Kyrgyzstan for the reconstruction of the North-South Corridor, a vital road link. The Eurasian Development Bank, the Islamic Development Bank, the Saudi Fund for Development and China’s Export-Import Bank are also participating in the reconstruction of the road.

ENDS

(News report from Issue No. 298, published on Sept. 30 2016)

World Bank finances Uzbek textile factory

SEPT. 13 2016 (The Conway Bulletin) – The International Labor Rights Forum published a report corroborating claims that the World Bank could be inadvertently financing a textile factory involved in forced labour practices. The report, which follows a petition in July sent by human rights activists directly to the World Bank, targets specifically an Uzbek-Indonesian joint venture, Indorama Kokand Textile. The World Bank had previously denied the allegations, saying it only deals with forced labour-free companies.

ENDS

(News report from Issue No. 296, published on Sept. 16 2016)

ADB approves loan to Kazakhstan

SEPT. 1 2016 (The Conway Bulletin) — The Asian Development Bank (ADB) approved a $240m loan to help Kazakhstan improve a 185-km highway around its northern Caspian Sea shore to Russia. The road is important to link Kazakhstan to Russia and the South Caucasus via land, giving it further access to European markets. The ADB said the road improvements will open up new trade and investment opportunities.

ENDS

(News report from Issue No. 294, published on Sept. 2 2016)

EBRD considers stake rise in Azerbaijan

JULY 22 2016 (The Conway Bulletin) — The European Bank for Reconstruction and Development (EBRD) said it will postpone its decision to increase its stake in Holcim Azerbaijan, a cement company. The EBRD already owns a 10% stake in the company. Switzerland-based LafargeHolcim (66%), Germany’s Holcim (10%) and other private investors (14%) own the rest of the company. The EBRD said it will wait until September to take a decision.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

EBRD considers Azerbaijani gas

JULY 26 2016 (The Conway Bulletin) — The European Bank for Reconstruction and Development (EBRD) said it is negotiating financing TAP, a trans-Adriatic gas pipeline which forms part of the so-called Southern Gas Corridor network that will pump Azerbaijani gas to Europe. In an interview with AP, the EBRD said it is looking to invest €500m ($550m) in the project. Azerbaijan’s state-owned SOCAR (20%), BP (20%), Italy’s Snam (20%), Belgium’s Fluxys (19%), Spain’s Enagas (16%), and Switzerland’s Axpo (5%) own TAP.

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

IMF considers loan to Tajikistan

JULY 26 1 2016 (The Conway Bulletin) — Negotiations for a $500m IMF loan are continuing, Jamoliddin Nuraliyev, deputy chief of Tajikistan’s Central Bank told local media. The IMF has scheduled a visit to the country in August to lay out details for the loan. Mr Nuraliyev said that the country needs support to see it through a “difficult economic period.”

ENDS

(News report from Issue No. 291, published on Aug. 1 2016)

Azerbaijan’s gas corridor to be funded

JULY 20 2016 (The Conway Bulletin) — Azerbaijan’s finance minister Samir Sharifov said that his country is in talks with several international financial institutions to raise funds to pay for the construction of the so-called Southern Gas Corridor, a network of pipelines that will pump gas from the Caspian Sea to Europe. Mr Sharifov told the FT that the World Bank, the European Bank for Reconstruction and Development and the Asian Development Bank are all considering supporting the project.

ENDS

(News report from Issue No. 290, published on July 22 2016)

Kyrgyz President signs CASA-1000 deals

JULY 19 2016 (The Conway Bulletin) — Kyrgyz President Almazbek Atambayev signed a range of laws that ratify domestic and international agreements on CASA-1000, an electricity transmission project that will send power from Tajikistan and Kyrgyzstan to Afghanistan and Pakistan. Loans from international lenders, including the World Bank and the Islamic Development Bank, will make up 70% of Kyrgyzstan’s total funding for the project.

ENDS

(News report from Issue No. 290, published on July 22 2016)

ADB sends loan to upgrade Azerbaijan’s electricity

JULY 15 2016 (The Conway Bulletin) — After lengthy negotiations, the Asian Development Bank (ADB) decided to loan $750m to Azerbaijan, to co-fund improvements to the country’s power distribution sector.

The aim is to connect peripheral regions outside Baku, which suffer from chronic system losses, to the main grid and reduce inefficiency and waste. But with electricity generation falling, Azerbaijan needs to put more attention and effort towards its upstream power sector, rather than the downstream.

It’s true that Azerbaijan is self- sufficient and produces all the electricity it consumes domestically, as the ADB also said.

The worry is rather on the shrinking margin of extra production allocated to exports.

In 2015 electricity exports halved compared to the previous year according to Azerbaijan’s customs agency. Azerbaijan exported 276.8m kWh of electricity in 2015 against 588.3m kWh in 2014.

And the problems continued this year.

In the first half of 2016, electricity generation at Azerlight, the country’s main producer, fell by 6%, compared to the same period last year, to 10.8b kWh. Consumption, on the other hand, continued to grow exponentially at annual rates of 5-9% since 2010.

For quite some time Azerbaijan has said it wants to export more electricity to its neighbours Turkey and Iran, a power export target that seems in vogue across the region currently.

Now this option seems to be falling off the priority list as the government has become increasingly worried that Azerbaijan could soon need external help to fulfil its domestic demand.

ENDS

(News report from Issue No. 289, published on July 15 2016)